Fate of Oil-rich City Crucial to Stability of Iraq

The future stability of Iraq may turn on the fate of the oil city of Kirkuk, who’s estimated 570,000 people are caught in a bitter dispute between the country's Kurdish minority and the central government in Baghdad.

Iraq's Kurds, who comprise about 20 per cent of the national population, claim Kirkuk as their own. Some refer to the city as the "Jerusalem of the Kurds" and its value is increased because it sits on some of Iraq's richest oilfields, with about 40 per cent of the country's known reserves found in the surrounding area.

Saddam Hussein tried to guarantee his hold on Kirkuk by ethnically cleansing many of its Kurds and replacing them with Arab arrivals. Since his downfall in 2003, Kurdish leaders have sought to reclaim the city and make it the capital of their autonomous regional government in northern Iraq. Many fear that this issue could escalate into civil war.

An enormous Kurdish flag stretches around the mound of Kirkuk's ancient citadel. In a nearby market, the scene is almost medieval, with smoke rising from burning rubbish and crates of live fowls stacked in the street.

Under article 140 of the Iraqi constitution, a referendum should decide the status of any disputed territories, including Kirkuk. Yet the city has a mixed population, divided not only between Kurds and Arabs, but also Turkmen and Christians. No one can tell which group - if any - comprises the majority and the Baghdad government has dragged its feet on holding the referendum. Fuad Hussein, the chief of staff for Masoud Barzani, the president of the Kurdish regional government, said it was crucial to hold the referendum soon. "We must have a timetable at least before 2011," he said.

In the aftermath of the general election, the Kurdish parties are likely to wield significant power in the bargaining to create a new coalition government in Baghdad. But Joost Hiltermann, an Iraq expert at the International Crisis Group, cautioned against exaggerating the strength of the Kurdish negotiating position.

"The Americans are telling them not to make [Kirkuk] an issue that it should not hold up the formation of the next government" he said.

The scheduled withdrawal of all US forces from Iraq next year is giving a sense of urgency to resolving the dispute over Kirkuk. There are also powerful regional interests at work.

Turkey, which has its own Kurdish minority, does not want the Kurds to gain control over Kirkuk, fearing this would encourage their ambition to form an independent state.

A political solution cannot come soon enough for most people in Kirkuk, who have paid the price for the wider dispute over the cities - and Iraq's - future.

Thanks to the dispute, its development has lagged behind other Iraqi cities. "It's not under the control of the Kurdish regional government and it's only marginally influenced by the central government, so there's less rule of law and oversight," said Denise Natali from the American University of Sulaimaniyah.

An Arabic-speaking tailor in Kirkuk said: "It's not important who runs the city, it's who brings security." A few doors down, a grocer voiced the same opinion. "It doesn't matter if